This week, I checked in with supply chain insiders to hear about the top tactics used by brands and retailers navigating President Trump’s global tariffs. Additionally, Walmart tests high-touch “beauty bars” in 40 stores, Ulta Beauty’s former CMO joins SharkNinja, and Unilever shutters sustainability-focused Ren Skincare.
As suppliers struggle, brands and retailers investigate new supply chains and tariff workarounds
On Monday, the beauty and wellness industries woke up to the possibility of tariff relief: President Trump told reporters this weekend that trade deals could be announced as early as this week.
“There’s a sense of chaos, you know? How do you make a plan when you don’t know what’s going to happen?” said Elle Shelley Black, CEO and co-founder of Made Technologies, an AI-powered manufacturing, inventory management and financing platform based in Silicon Valley. “Do you stay the course, or do you quickly reshore? Do you try to work with your existing supply chain while trying to build new supply chains?”
On Friday, the rollback of the “de minimis loophole” took effect, adding a 145% tariff to low-value packages from China and Hong Kong, which make up the lion’s share of the approximately 1.4 billion packages that enter the U.S. annually. This change adds pressure to small- and medium-sized businesses that relied on the longtime duty-free expectation.
This change compounds with the mounting pressure on brands to strategically plan for the next deadline: July 8, when the 90-day extension on global tariffs ends with yet-to-be-determined new duties.
Made Technologies manufactures products for top brands sold in retailers like Sephora, Ulta Beauty, Credo Beauty and Whole Foods.
“There is some goodwill built up in the industry [between retailers, brands and supply chain stakeholders], which is nice to hear, but we’re running out of time,” said Black. She told Glossy that nearly every brand she works with is quietly trying to develop a second or third supply chain in an effort to find relief for the quickly shifting environment of Trump’s second term. Suppliers, such as raw materials suppliers, contract manufacturers and packaging companies, are being hit the hardest right now, she said.
“There’s a sense of, ‘Maybe this won’t last,’” Black said. She is seeing many suppliers absorb the additional costs and duties to avoid disruption of their supply chains, all in an effort to reduce the desire for brands to develop secondary ones.
“Every purchase order is up for grabs — every single one,” Black said. That is, every brand she works with is reconsidering its contract manufacturing partners right now. She told Glossy that many brands are aiming for a secondary supply chain in under six months: eight weeks to develop the products and another eight to manufacture them at scale, plus weeks of applicable time in finding and courting new CMs before the work can get started.
Foreign Trade Zones are also a top tactic, Black said. “FTZs are spaces in the U.S. that are designated as a foreign zone, so you can send your inventory and you don’t pay your duties and tariffs right away, like you normally would at Port with a one-time Bill,” Black said. “You can pay them as you sell the product, one by one.” You still pay the tariffs eventually, but it’s “a cash flow shifting challenge,” Black said.
This may be less necessary for bigger brands, many of which have already stockpiled components and finished goods to last through the holidays, although smaller brands may not have the same access. To wit: There are less than 300 FTZs in the U.S. and they’re hard to secure, Black said.
Of course, if consumers keep shopping and tariff deals come soon, this could all feel like a flash in the pan come next year.
According to Yale University’s Budget Lab, which tracks tariff impacts, “Consumers face an overall average effective tariff rate of 28%, the highest since 1901.” However, that’s only up 10% from earlier this year, meaning the brunt of the tariffs has yet to be seen.
Still, it’s impacting shopping behavior already, said Angie Westbrock, CEO of Standard AI, a Silicon Valley startup using AI and computer vision technology to develop insights into shopping habits in grocery, mass and specialty stores.
“We can see shifts in consumer behaviors as [shoppers] start to become a little more price sensitive,” she said. “[We are seeing] higher dwell time in front of certain items and different types of browsing activities — and those are the types of things that give us leading indicators about how customers are contemplating purchases differently as things start to change in the market.”
This tracks with consumer sentiment, which fell for the fourth straight month, dropping 8% from March according to The University of Michigan.
“Very large, established, mature companies have gotten very good at navigating supply chains,” she said. “This becomes very difficult for smaller and boutique suppliers.” Still, she’s optimistic that brands will call upon Covid-era tactics to make do. “We’ve already seen retailers and brands be very resilient in how they’re handling [challenges],” she said. “We made it through the pandemic, right?”
Executive moves:
- The executive team at Macy’s Inc. — parent company to Macy’s, Bluemercury and Bloomingdale’s — will undergo a shakeup effective June 22, including reporting structure changes and at least one role turnover. Thomas J. Edwards is set to become COO and CFO of Macy’s Inc. Most recently, he held the same title at Capri Holdings. He succeeds Adrian Mitchell.
- Michelle Crossan-Matos, former CMO of Ulta Beauty, is the first chief growth officer of SharkNinja. Crossan-Matos left Ulta Beauty at the top of the year. Her CV also includes Samsung and P&G. SharkNinja creates a variety of beauty devices that compete with hairstyling and red light device manufacturers.
News to know:
- Walmart is testing a new in-store “beauty bar” concept to drive cosmetics, skin-care and hair-care sales through its spring beauty sales event. The retailer added beauty bars to 40 stores. They will be staffed by beauty experts to help answer questions and distribute samples. Walmart’s annual spring sale includes discounts on 1,800 items and runs from April 18 to May 31.
- Unilever has announced it will shutter sustainability-focused skin-care brand Ren by the end of Q3. Ren was an early adopter of packaging takeback programs, which are now commonplace in the industry. Unilever attributed the move to internal challenges made worse by unstable market conditions, according to Reuters.
- On Tuesday, supplement company Ritual unveiled a human clinical study on its Essential Prenatal multivitamin, making it the only leading prenatal backed by its own human clinical trial, chief impact officer Linsday Dahl told Glossy. Clinical studies continue to be a major focus for brands seeking to stand out in the saturated supplement space. Last week, AG1 also unveiled a formula update with four clinical human trials.
- Condé Nast-owned Allure magazine launched its third international title last week: Allure Philippines. The new English-language launch will encompass print, digital and social and will be helmed by EIC Rissa Mananquil Trillo. The launch is in partnership with Mega Global Licensing Inc.
- J.C. Penney has terminated its shop-in-shop partnership with diversity-focused retailer Thirteen Lune. The partnership launched in 2022 and grew to 600 store-in-stores. Thirteen Lune has been in the press this year for its mounting financial challenges.
Stat of the week:
Dollar General is one of the best stock performers of Trump’s first 100 days, according to reporting by CNBC on Wednesday. The discount retailer outperformed the S&P 500 and beat analysts: Shares have soared more than 36% as of closing on April 29, the third-largest percentage-point rise in the S&P 500 behind software company Palantir and tobacco giant Philip Morris International, the publication reports.
In the headlines:
Procter & Gamble CEO says price hikes are ‘likely’. Bubble Skincare and Olive & June team up. Dior Beauty opens flagship at South Coast Plaza. Chanel closes Atelier Beauté Chanel in SoHo. Freck Beauty founder sells brand, steps down. Estée Lauder brings skin longevity concept to Costa Rica.
Listen in:
Neutrogena spokesperson and TikTok-famous dermatologist Dr. Muneeb Shah, MD, joins the Glossy Beauty Podcast to discuss content wins and launching his own brand.
Need a Glossy recap?
Maybelline doubles down on mental health with expanded campus tour and digital investment. Kosas delves deeper into skin care, with community top of mind. The Estée Lauder Companies will lay off thousands of employees amid double-digit sale decline. Medicube’s influencer marketing-fueled mission to be No. 1 is working. Il Makiage owner Oddity believes it can withstand tariff uncertainty.
